Why did my iphone ask for my macbook air password?

I just did a security update on my iPhone SE (2020) (IOS v15.0.2). Afterwards, I clicked on Settings -> Apple ID, iCloud because it said that I needed to complete something with my Apple ID to sign in. I signed in using my Apple ID password (which is fine) but then it prompted me to enter my Macbook Air's password (which I did, maybe I shouldn't have).

I may have missed a step here. Unfortunately I can't reproduce exactly the sequence of events.

On my Macbook Air, according to System Preferences -> Apple ID -> iCloud I am only saving my Contacts, Calendars and Find My Mac to iCloud. Note that I do NOT save my Keychain to the cloud.

Why did Apple want my Macbook Air password? It was my impression that it is locally used and that it (nor its hash) is stored in the cloud. Clearly Apple has a hash of it stored somewhere.

Solution 1:

To allow recovery of end-to-end encrypted content (Keychain, Health data, HomeKit, etc.) your device passwords are used.

When your phone prompted for your MacBook Air password, it needed that password to gain trusted access to those items in iCloud. This is normal and you were correct to enter the password (to the same extent you would have been correct to enter your iCloud password in the same context).

The alternative is reduced account security or the inability to recover those items if you forget your main Apple ID password.

Just because you have Keychain off does not mean that your devices to not get access to this trusted data store. They are still authorized, they simply will not when those checkboxes are disabled. The alternative would have been resetting those parts of the iCloud data store (in most cases they would be automatically refilled from on-device data).